Walmart shift into neighborhoods a nationwide strategy

Published: Wednesday, February 20, 2013 at 10:10 p.m.

Last Modified: Wednesday, February 20, 2013 at 10:10 p.m.

SARASOTA - Proposing two new — but very different — Walmart stores in Sarasota simultaneously represents a logical next step in Southwest Florida for the world's biggest retailer, industry analysts say.

Though Walmart Stores Inc. has stirred ire among residents who believe a proposed Supercenter at the Ringling Shopping Plaza and a smaller grocery at Beneva and Bee Ridge roads will spur traffic congestion and other issues, the moves make sense as part of a larger strategy to enhance sales.

“Walmart used to be a suburban retailer, but they're focusing more on urban development because they can't build Supercenters like they used to — there's no more room,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York. “The growth is in smaller stores and more populated markets, and that's true for retail all over.”

Both proposed stores in Sarasota — supplanting an aging, supermarket-anchored shopping center and a church, respectively — would fit that corporate desire.

By filling in the proverbial gaps between stores, the Bentonville, Ark.-based chain can capture more of the overall shopping market.

“Most customers couldn't tell you the total number of Publix or Starbucks there are in Sarasota, but they can tell you about the options they have closest to them,” said Walmart spokesman Bill Wertz. “Our store siting process is based on meeting local customer demand.”

Neighborhood concept

Walmart's push into Sarasota County began with a single store near Interstate 75 about 15 years ago.

The store at 4381 Cattlemen Road was significantly expanded and converted to a Supercenter — complete with grocery — in 2009.

In all, there are now more than a dozen Walmart supercenters in Sarasota, Manatee and Charlotte counties.

But Walmart's Neighborhood Market concept is only now budding here. There is just a single neighborhood market in Sarasota, on North Tamiami Trail.

The company hopes to build another in Bradenton and one on the site of the River's Edge Community Church, at Beneva and Bee Ridge roads.

Limited land zoned for commercial space in developed areas of the region's three counties also influenced the size of the proposed 98,000-square foot superstore on Ringling Boulevard, analysts say.

Connecting the dots

Walmart has experimented with smaller store formats for years.

The neighborhood market stores, for instance, first debuted almost a decade ago.

Walmart Express, an even smaller storefront concept, is being tested in rural markets this year. The chain believes those stores will be able to sell grocery and other food items for less because they will have less overhead.

Southwest Florida's first neighborhood market opened in late September, on the former site of a Winn-Dixie on North Tamiami Trail.

The 34,000-square-foot grocery differs from traditional Walmart stores because it is a third of the size, and offers food and pharmacy and beauty departments, similar to other supermarket chains such as Publix, Winn-Dixie and Sweetbay.

The Beneva-Bee Ridge store will be contingent upon a property sale to developer Jebco Ventures Inc. and a rezoning.

Walmart has proposed a 41,180-square-foot grocery there, according to Sarasota County documents, which would compete with a 24-hour Walgreens and a recently renovated Publix Supermarket at the same intersection.

“Many are traveling great distances to take advantage of the broad assortment of products that our stores provide,” Wertz said. “Residents want job opportunities and affordable shopping options close to where they live or work, and we think our stores can be part of the solution in both regards.”

Regional tapestry

By opening grocery stores on infill sites, analysts note, the retail giant is weaving together its stores into a tapestry that will cover the entire region.

Where a Walmart Supercenter might attract shoppers from several miles away because of its vast array of goods and discounted prices, neighborhood market formats appeal mostly to those who live nearby and are shopping more for convenience.

The proposed Bee Ridge-Beneva neighborhood market would be just four miles from the existing Supercenter on Cattlemen, for example.

The Walmart Neighborhood Market at 3500 N. Tamiami Trail is less than five miles from the chain's Supercenter on Lockwood Ridge Road.

“We are talking about two completely different venues that could co-exist across the street from one another,” said Dale Scott, senior executive vice president of Sikon Construction, a Deerfield Beach-based commercial builder and Walmart builder in Florida. “The market stores compete with Publix, Winn-Dixie and Aldi.”

Walmart's neighborhood markets also are designed to compete with convenience-oriented stores like Walgreens and CVS Pharmacy, and even brands like Dollar Tree and Family Dollar that have expanded their grocery options in recent years.

On North Tamiami Trail, for example, the Walmart Neighborhood Market shares an intersection with a Family Dollar, CVS and a Walgreens.

“Walmart's niche is price, and in today's economy, that's still a very important niche,” Davidowitz said. “That will still win over quality.”

Neighborhood Markets attract a different kind of customer, too, said Pat Fitzpatrick, president of Atlanta Retail Consulting.

“This is Walmart's version of a convenience store,” Fitzpatrick said. “Walmart is going to compete with anyone based on brand strength and their pricing. They want to catch the shopper who needs to stop in for only one or two items on the way home from work, then get the whole family looking to a month's worth of shopping on the weekends at the Supercenters.”

Resident backlash

While both Walmart concepts may appeal to consumers, the two proposed sites in Sarasota also have spurred consternation of residents, who plan to fight.

As evidence of that pending battle, dozens showed up to protest the Ringling Shopping Plaza store Tuesday when plans were reviewed by the Sarasota City Commission.

The commission plans to make a decision on that store next week.

But analysts contend that Walmart, which is accustomed to protests and opposition, has factored into its plans what could be a protracted legal or political battle.

In Sarasota, the retailer shelved plans in 2007 for a Supercenter on U.S. 301, in Newtown, after considerable community opposition.

“This isn't Walmart's first rodeo,” Scott said. “They do a lot of research before setting their sights on a particular market. Walmart is a mammoth retailer and people like to complain about it, but they certainly will find shoppers in Sarasota.”

<p><em>SARASOTA</em> - Proposing two new — but very different — Walmart stores in Sarasota simultaneously represents a logical next step in Southwest Florida for the world's biggest retailer, industry analysts say.</p><p>Though Walmart Stores Inc. has stirred ire among residents who believe a proposed Supercenter at the Ringling Shopping Plaza and a smaller grocery at Beneva and Bee Ridge roads will spur traffic congestion and other issues, the moves make sense as part of a larger strategy to enhance sales.</p><p>That entails shifting away from large, suburban stores requiring ample land and road networks toward primarily smaller stores on more urban-oriented sites.</p><p>“Walmart used to be a suburban retailer, but they're focusing more on urban development because they can't build Supercenters like they used to — there's no more room,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York. “The growth is in smaller stores and more populated markets, and that's true for retail all over.”</p><p>Both proposed stores in Sarasota — supplanting an aging, supermarket-anchored shopping center and a church, respectively — would fit that corporate desire.</p><p>By filling in the proverbial gaps between stores, the Bentonville, Ark.-based chain can capture more of the overall shopping market.</p><p>“Most customers couldn't tell you the total number of Publix or Starbucks there are in Sarasota, but they can tell you about the options they have closest to them,” said Walmart spokesman Bill Wertz. “Our store siting process is based on meeting local customer demand.”</p><p><B>Neighborhood concept</b></p><p>Walmart's push into Sarasota County began with a single store near Interstate 75 about 15 years ago.</p><p>The store at 4381 Cattlemen Road was significantly expanded and converted to a Supercenter — complete with grocery — in 2009.</p><p>In all, there are now more than a dozen Walmart supercenters in Sarasota, Manatee and Charlotte counties.</p><p>But Walmart's Neighborhood Market concept is only now budding here. There is just a single neighborhood market in Sarasota, on North Tamiami Trail.</p><p>The company hopes to build another in Bradenton and one on the site of the River's Edge Community Church, at Beneva and Bee Ridge roads.</p><p>Limited land zoned for commercial space in developed areas of the region's three counties also influenced the size of the proposed 98,000-square foot superstore on Ringling Boulevard, analysts say.</p><p><B>Connecting the dots</b></p><p>Walmart has experimented with smaller store formats for years.</p><p>The neighborhood market stores, for instance, first debuted almost a decade ago.</p><p>Walmart Express, an even smaller storefront concept, is being tested in rural markets this year. The chain believes those stores will be able to sell grocery and other food items for less because they will have less overhead.</p><p>Walmart operates 10 Express stores, none in Florida, and more than 200 neighborhood markets nationwide.</p><p>Southwest Florida's first neighborhood market opened in late September, on the former site of a Winn-Dixie on North Tamiami Trail. </p><p>The 34,000-square-foot grocery differs from traditional Walmart stores because it is a third of the size, and offers food and pharmacy and beauty departments, similar to other supermarket chains such as Publix, Winn-Dixie and Sweetbay.</p><p>The Beneva-Bee Ridge store will be contingent upon a property sale to developer Jebco Ventures Inc. and a rezoning.</p><p>Walmart has proposed a 41,180-square-foot grocery there, according to Sarasota County documents, which would compete with a 24-hour Walgreens and a recently renovated Publix Supermarket at the same intersection.</p><p>“Many are traveling great distances to take advantage of the broad assortment of products that our stores provide,” Wertz said. “Residents want job opportunities and affordable shopping options close to where they live or work, and we think our stores can be part of the solution in both regards.”</p><p><B>Regional tapestry</b></p><p>By opening grocery stores on infill sites, analysts note, the retail giant is weaving together its stores into a tapestry that will cover the entire region.</p><p>Where a Walmart Supercenter might attract shoppers from several miles away because of its vast array of goods and discounted prices, neighborhood market formats appeal mostly to those who live nearby and are shopping more for convenience. </p><p>The proposed Bee Ridge-Beneva neighborhood market would be just four miles from the existing Supercenter on Cattlemen, for example.</p><p>The Walmart Neighborhood Market at 3500 N. Tamiami Trail is less than five miles from the chain's Supercenter on Lockwood Ridge Road. </p><p>“We are talking about two completely different venues that could co-exist across the street from one another,” said Dale Scott, senior executive vice president of Sikon Construction, a Deerfield Beach-based commercial builder and Walmart builder in Florida. “The market stores compete with Publix, Winn-Dixie and Aldi.” </p><p>Walmart's neighborhood markets also are designed to compete with convenience-oriented stores like Walgreens and CVS Pharmacy, and even brands like Dollar Tree and Family Dollar that have expanded their grocery options in recent years. </p><p>On North Tamiami Trail, for example, the Walmart Neighborhood Market shares an intersection with a Family Dollar, CVS and a Walgreens.</p><p>“Walmart's niche is price, and in today's economy, that's still a very important niche,” Davidowitz said. “That will still win over quality.”</p><p>Neighborhood Markets attract a different kind of customer, too, said Pat Fitzpatrick, president of Atlanta Retail Consulting. </p><p>“This is Walmart's version of a convenience store,” Fitzpatrick said. “Walmart is going to compete with anyone based on brand strength and their pricing. They want to catch the shopper who needs to stop in for only one or two items on the way home from work, then get the whole family looking to a month's worth of shopping on the weekends at the Supercenters.”</p><p><B>Resident backlash</b></p><p>While both Walmart concepts may appeal to consumers, the two proposed sites in Sarasota also have spurred consternation of residents, who plan to fight.</p><p>As evidence of that pending battle, dozens showed up to protest the Ringling Shopping Plaza store Tuesday when plans were reviewed by the Sarasota City Commission. </p><p>The commission plans to make a decision on that store next week.</p><p>But analysts contend that Walmart, which is accustomed to protests and opposition, has factored into its plans what could be a protracted legal or political battle.</p><p>In Sarasota, the retailer shelved plans in 2007 for a Supercenter on U.S. 301, in Newtown, after considerable community opposition.</p><p>“This isn't Walmart's first rodeo,” Scott said. “They do a lot of research before setting their sights on a particular market. Walmart is a mammoth retailer and people like to complain about it, but they certainly will find shoppers in Sarasota.”</p>